Our Post-Exam Review of the July 2024 CII R06 Exam
The exam guide from the July sitting of R06 has been released by the CII, prompting us to see how we did in predicting the questions and model answers in our pre-exam analysis.
This article is correct as at 22 August 2024.
You can access the exam guide here.
Case Study 1
Case Study 1 introduced us to Max, a single man aged 65 with objectives centered around retirement provision.
His stated financial aims were to:
- ensure he can generate a sustainable income throughout retirement;
- adjust his investment portfolio to generate additional income in retirement;
- improve the tax-efficiency of his current financial arrangements
| Question | Our Analysis |
|---|---|
| State the additional information that a financial adviser would require in order to advise Max on the suitability of his current financial arrangements to meet his retirement objectives. | Our analysis always includes model answers for a fact-finding question covering all the client’s financial arrangements for both case studies. We therefore hope most candidates using our analysis would have got off to a flying start! |
| Explain to Max how his current pension lifestyle fund operates and identify the key reasons why this particular fund may not be suitable to meet his long-term objectives. | It's always important to understand the pros and cons of each of the funds the clients hold as at least one of them will usually be examined. For this case study, it was the pension lifestyle fund that was tested, and we had included details of why this fund may not be suitable for Max. |
| Recommend and justify how Max could adjust the investment strategy within his OEIC and investment trust portfolio to generate additional tax-efficient income for him in retirement. | We had included the use of ISAs/Bed and ISAs and the benefits of increasing his fixed interest holding in the analysis. These points would have picked candidates up the majority of marks on offer here. |
| Outline the key reasons why Max should monitor the suitability of his holdings in the AIM stocks on a regular basis. | Our analysis had included the question ‘Explain to Max the importance of conducting a review of his investments and reviewing them on a regular basis thereafter.’ Some of the model answers here could have been adapted to answer this question specific to the AIM stocks. |
| Explain to Max why he should review his nominations and Will. | The importance of reviewing a Will was detailed in the ‘Generic Section’ of our analysis. Candidates would have needed to personalise these answers to Max’s situation. |
| Explain to Max the process that will be followed to wind up his estate on his death and how his estate would be treated for Inheritance Tax purposes. No calculations are required. | Although IHT was not one of Max’s stated objectives. There was a signpost in the case study that gifting to charity on death could be tested. We had therefore covered the details around how his estate would be treated for IHT purposes. |
| Recommend and justify a range of actions that Max could take to improve the tax efficiency of his financial arrangements | When one of the stated aims is to improve tax efficiency, we always include model answers to a ‘recommend and justify’ question around improving tax efficiency. |
Case Study 2
Onto case study two where we met Karina and Amir. Karina had been off work with a back injury. Their objectives were to ensure their financial arrangements are suitable in the short term whilst she is unable to work and for the longer term.
Their stated financial aims were to:
- review the suitability of their current investment holdings;
- make adjustments to their financial arrangements during Karina’s absence from work;
- improve their current retirement savings plans.
| Question | Our Analysis |
|---|---|
| State briefly the reasons why you might consider Karina to be a vulnerable client. | We had raised the issue of Karina being classed as a vulnerable client due to her back injury and we had also outlined the weaknesses of their current financial situation. If candidates had picked out these points to answer this question they would have scored well. |
| Explain to Karina how any payment she receives from her employer’s income protection insurance scheme will be paid to her and how it will be treated for tax purposes. Karina’s employer’s income protection scheme provides a proportionate benefit if the relevant conditions are met. Outline to Karina how the proportionate benefit operates and how this may be of use to her during her recovery | Most of the points needed to answer this question were highlighted in our SWOT analysis. We had not included a question on proportionate benefit in detail. Some information was available in our generic section under income protection. We hope candidates were able to apply their own knowledge to pick up the marks on offer here. |
| Explain to Karina why she may be eligible to receive Personal Independence Payment (PIP) and the benefits that it might provide for her. | We had anticipated this question so full model answers were provided. |
| State the reasons why Amir and Karina should not consider taking a mortgage payment holiday at the present time. | We had covered the key reasons why a payment holiday is not suitable . |
| Recommend and justify a range of actions that Amir and Karina could take to improve their current retirement savings provision. | As this was one of their key objectives, we had included a detailed ‘recommend and justify’ question on improving retirement savings. |
| Explain to Amir why he should consider switching a portion of his current global fixed-interest fund within his pension plan into an equity-based fund. | We had highlighted why this existing fund may not suitable and recommended equity funds as a suitable alternative. |
| Identify eight key issues that a financial adviser should discuss with Amir and Karina at their next annual review. | Issues to discuss at the next annual review is a standard R06 question. We therefore always include model answers for both case studies. A good end to the exam we hope! |
Overall, this paper was quite tough. Although the standard R06 fact-finding question, annual review question, and the ‘recommend and justify’ questions were included, there were a number of questions that were harder to predict such as proportionate benefits and the two questions around Max’s estate. Even if candidates had been thrown by these questions, we believe the well-prepared candidate, who had studied our analysis in detail, could have picked up enough marks on the standard questions to get the pass.
Grab the resources you need!
If you’re studying for your CII R06 exam, and you’re wanting to feel more confident on exam day, grab our free taster analysis to try out one of Brand Financial Training’s resources for yourself. Click the link to download the R06 case study analysis taster now!
